What Myanmar law says
Severance under the Employment & Skills Development Law (ESDL) 2013 is calculated using two inputs: gross monthly salary at the time of termination and the tenure multiple from Notification 84/2015 (or its successor). Severance does not include bonuses, one-off payments, or reimbursements — it is the standard monthly compensation the employee was contracted to receive. The tenure clock runs from the start date in the signed contract, not from probation confirmation.
Tenure multiplier table
| Tenure | Severance multiple (× gross monthly salary) |
|---|---|
| < 6 months | 0 |
| 6 months – 1 year | 0.5 |
| 1 – 2 years | 1 |
| 2 – 3 years | 2 |
| 3 – 4 years | 3 |
| 4 – 5 years | 4 |
| 5 – 6 years | 5 |
| 6 – 8 years | 6 |
| 8 – 10 years | 7 |
| 10+ years | 9 plus extras for very long tenure |
Worked example — 4-year employee on MMK 1,500,000
| Item | Amount (MMK) |
|---|---|
| Gross monthly salary | 1,500,000 |
| Tenure | 4 years |
| Severance multiple | 4 |
| Severance amount (1,500,000 × 4) | 6,000,000 |
| Notice (1 month, < 5 yrs) | 1,500,000 |
| Leave encashment (10 days unused, MMK 50,000/day) | 500,000 |
| Final settlement (gross) | 8,000,000 |
What if there's a dispute
- Township labour office first — common dispute is the employer using basic instead of gross salary.
- Conciliation Body — formal conciliation under the Settlement of Labour Disputes Law.
- Arbitration Council — final binding step. Statute of limitations: typically 6 months.
Employer takeaway
Calculate severance as gross monthly salary × the Notification 84/2015 multiple for the employee's tenure band. Pay severance alongside notice (or pay in lieu), leave encashment, and outstanding wages within 7 days of the last working day. Withhold PIT, deregister from SSB within 30 days, and keep the calculation worksheet on file for at least 7 years.
Edge cases and unenforceable clauses
- Salary recently increased — use the current gross salary at termination.
- Salary recently reduced — if without consent, use the higher pre-reduction salary.
- Variable-pay employees — typically use the average of the last 12 months.
- See severance overview and when severance is not payable.
Common severance-calculation mistakes
- Using basic salary instead of gross.
- Counting tenure from confirmation date, missing the probation months.
- Applying the wrong multiplier band — verify the schedule before paying.
- Netting severance against employee loans without written consent — illegal under the Payment of Wages Law.
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